Resource Center

TCRP 31: Funding Strategies for Public Transportation, Final Report

The transit industry in the United States has experienced a number of changes in recent years. There have been demographic shifts in transit markets, policy initiatives, and funding changes at all levels — these changes have led to concerns about the ability of transit agencies to remain financially viable over the short and long terms. TCRP Project H-7 was initiated to highlight these issues and suggest solutions to this perceived growing financial "crisis" among U.S. transit agencies.

Over the past 30 years, transit agencies have been supported primarily by federal, state, and local funds, combined with fare revenues. However, many transit agencies believe that operating and capital costs are rising rapidly, in part because of policy goals and mandates, while farebox revenues and public funding — especially federal funding — are not keeping pace. Federal operating funding levels in particular have decreased significantly since 1994 and may be eliminated in 1998 except in the smallest urbanized and rural areas. As a result, many agencieshave been compelled to adjust service levels and modify their funding strategies by increasing state and local shares and looking to non-traditional revenue sources.